Senator Clinton Raises Big Money, but Overhead Is Costly

By RAYMOND HERNANDEZ

Published: June 4, 2002

WASHINGTON, June 3—
When Senator Hillary Rodham Clinton formed a political action committee last year, her aides said the goal was simple enough: to raise money on behalf of Democrats around the country.

Even leading Republicans recognize her fund-raising prowess, noting that her star power draws standing-room crowds across the country. This month alone, Senator Clinton is among the more popular headliners, appearing at big fund-raisers for candidates running in Texas, Oklahoma, New Hampshire and Illinois.

But along with the thousands of dollars she raises for individual Democratic candidates through her committee, known as Hillpac, comes substantial overhead costs -- money paid to cover staffing and other expenses rather than to the individual politicians running for office.

Last year, slightly less than one-fourth of the $1.3 million that the committee raised -- or about $300,000 -- went to Democratic candidates and organizations. The bulk of the rest -- $835,000 -- was spent on a range of other expenses, including legal fees and salaries for, among others, former White House aides who are now employed by her committee, according to a Hillpac official and campaign finance records.

While Senator Clinton's leadership committee is not racking up the highest overhead cost among the top money-making funds, watchdog groups that monitor campaign fund-raising disapprove of these large political action funds.

They contend that the funds actually serve as auxiliary slush funds to help individual politicians curry favor and advance their standing in Congress or in their respective political parties.

Most other leadership committees, run by top Democrats and Republicans to help candidates nationwide, also run up sizable costs in administrative and overhead expenses that chip away at the millions of dollars donated. But at times, these fund-raising committees manage to reduce costs and ship more to candidates, like in the 2000 election year, when Senator Tom Daschle's committee gave away half of the $2.2 million it collected.

Senator Clinton's committee is a so-called leadership PAC, an increasingly popular tool among politicians in Congress that allows them to raise money beyond what their own re-election committees can collect and to spread that money around to political allies.

Her advisers note that the leadership committees established by her colleagues -- Senator Trent Lott, the Republican leader, and the Senate majority leader, Mr. Daschle, a Democrat from South Dakota -- gave other candidates a smaller percentage of the money they raised last year than Hillpac did.

They point out that while Mrs. Clinton's committee gave other candidates a little less than a quarter (or $313,000) of the $1.3 million it raised in 2001, Mr. Daschle's contributed 10 percent (or $176,000) of the $1.8 million it took in, and Mr. Lott's disbursed 9 percent (or $192,000) of the $2.1 million it collected.

''Hers is the most efficient and generous PAC,'' said Mrs. Clinton's spokesman, James E. Kennedy. ''Her goal is to help as many Democrats as possible.''

But in other election years, individual candidates have gotten a far larger share of the money these leadership committees raised. For example, Mr. Daschle's committee, Dashpac, gave Democratic candidates and organizations 50 percent (or $1.1 million) of the $2.2 million that it raised in the 2000 election cycle, according to a spokeswoman for the committee.

The spokeswoman, Anita Dunn, also noted that while Dashpac gave only $176,000 of the $1.8 million it raised in 2001, the committee ended the year with about $1 million on hand. The difference, about $600,000, was spent on overhead expenses, she said. That is less than the $835,000 Hillpac spent on overhead that same year.

And fund-raising officials familiar with Mr. Lott's committee said its overhead costs were high in large part because much of its money is raised through direct-mail solicitations, an expensive way to raise funds. Mrs. Clinton's committee spent $96,000 on such mailings last year.

Fred Wertheimer, president of Democracy 21, a group that seeks to limit the role of money in politics, said Hillpac's spending suggested that Mrs. Clinton has created a political operation separate and apart from her Senate office to enhance her own interests.

He noted that it was not uncommon for politicians to use these leadership committees in this manner. ''They are mini political machines or large slush funds,'' Mr. Wertheimer said. They are used to take care of the needs of the members of Congress who start such funds, he said.

But Mrs. Clinton's advisers contend that there is nothing unusual or inappropriate about the way Hillpac spent the money it raised last year. The advisers also say that Mrs. Clinton's interest in helping other Democrats is underscored by the fact that she is spending less time raising money for Hillpac this year and more time headlining and holding fund-raising events for other Democrats.

In the first five months of this year, Mrs. Clinton has made a dozen such appearances, including some for her Senate colleagues, like Richard J. Durbin of Illinois, John Kerry of Massachusetts and Max Baucus of Montana, according to her advisers. Mrs. Clinton also headlined an event for Gov. Gray Davis of California during that period.